EU Emissions Trading System Concepts

The EU emissions trading system (ETS) mandates emission allowances for greenhouse gas emissions. These allowances are limited and tradable, incentivizing companies to reduce emissions cost-effectively. The EU ETS primarily covers electricity generation and large industries.

What is required by the EU emissions trading system (ETS) for greenhouse gas emissions?

• Emission credits

• Emission permits

• Emission certificates

• Emission allowances

What is the main purpose of trading emission allowances in the EU ETS?

• To increase emissions

• To reduce emissions cost-effectively

• To stabilize the market

• To promote industrial growth

What is the nature of emission allowances in the EU ETS?

• Limited and non-tradable

• Limited and tradable

• Unlimited and non-tradable

• Unlimited and tradable

Which sectors are covered by the EU ETS?

• Transportation and agriculture

• Healthcare and education

• Retail and hospitality

• Electricity generation and large industry

Why do companies participate in emission trading systems like the EU ETS?

• To increase their emissions

• To avoid government regulations

• To gain tax benefits

• To reduce emissions where cheaper than allowances